Temporary Occupancy Agreement,
Temporary Occupancy Agreement – In Short
Not all cases are cut and dried where upon closing of the escrow the property changes hands. There are exceptions to the rule. There are cases where the seller needs to stay in the house for a short period of time after closing of the escrow or needs to carry out repairs to the property even after closing the escrow. There are some times that the buyer wants to move into the house before the escrow closes. In both these cases a temporary occupancy agreement needs to be signed. This is done to cover all liabilities that have a possibility of arising. Incases of the buyers moving in, it covers scenarios of if the escrow falls through and the buyer cannot purchase the property. Sometimes the sellers have not found a home where they can move into and therefore need to stay on even after the escrow has closed.
However, there are several factors one needs to take into consideration. The insurance company generally does not cover buyers who are staying like tenants. Also, there could be problems incase there are problems with the house – the onus on who will take care of the repairs or the damages.
These documents need to be properly reviewed and that too with the help of an attorney. Once this is signed it is legal and binding. The document includes all sorts of terms and conditions including the amount of rental that has to be paid and the amount to be paid as well as other penalties incase the rent is not paid on time.
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